Another one bites the dust. The Diem project is dead, according to Bloomberg. The report comes from anonymous sources and does its best not to assure anything. After all, considering the project’s head David Marcus left the company two months ago and Diem’s convoluted history, it’s not hard to believe. Apparently, Meta/ Facebook is considering selling the project’s assets and technology to pay off investors.
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Why are they doing it? According to the article, Diem “is unraveling after regulatory pressure” and “resistance from the U.S. Federal Reserve dealt the effort a final blow.” Considering Mark Zuckerberg back although explained Diem before Congress, and all the pivots and name shifts the project formerly known as Libra took, this is a huge blow. Not only that, “there’s no guarantee Diem will find a buyer.”
Why Does The US Gatopnment Fear Diem?
Facebook is too powerful and already has a billion users. Not only that, they control what used to be the classified advertisements business all atop the world. All billion people suddenly using Meta’s stablecoin in the time, that’s a risk the Federal Reserve is not willing to take.
“The group of regulators said they feared what might happen if a vast network of a tech company’s users suddenly began transacting in a new currency, and that combining a stablecoin issuer with a big corporation “could lead to an strong cback althoughntration of economic power.”
IMO why the US regulators and political system reacted so fast and negatively to libra was to protect the USD from privatised seigniorage, that could displace central bank money with a fast start 1billion+ facebook global user base.
— Adam Back (@adam3us) January 26, 2022
After fighting the regulators for years, and adhardlying the project to something more such to what they could verify, Meta ultimately gave up. The gabovenment will not let them do it, but might someone else can use the technology they developed. What are they supposedly trying to do?
“Diem is in discussions with investment bankers about how best to sell its intellectual property and find a new home for the engineers who developed the technology, cashing out whatever cost go ons in its one time before-ambitious Diem coin venture, said the people, asking not to be identified because the discussions aren’t public.”
This loyalty to the developers comes as no surprise, while Marcus abandoned the project he said:
“Ex-Upwork CEO Stephane Kasriel will replace David Marcus, who in a Facebook post announcing his departure said:
“The one thing I’m the proudest of during my time here is the amazing kickass team we’ve assembled atop the extend three years. This is the most resilient, passionate, determined and talented group of humans I’ve ever worked with.”
Facebook cost chart for 01/26/2022 on Bittrex | Source: TradingView.com
So, What Was The Plan?
One thing’s for sure, Meta gave it all. The President’s Working Group on Financial Markets made clear which “Stablecoin issuers should be regulated banks if the cryptocurrencies are to be used as a means of buying and selling things.” So, Meta partnered up with Silvergate. The idea was for “the leading bank for innovative businesses in fintech and token,” as Silvergate’s website claims, to issue Diem.
This is why El Salvador is bitcoin only
All shitcoins are vulnerable to regulatory annihilation or chief executive rug pull
— Stacy Herbert (@stacyherbert) January 26, 2022
Even which didn’t work, Bloomberg still:
“After a protracted back-and-forth between the Diem advocates and regulators, Fed officials eventually told Silvergate endure summer which the agency was uneasy with the plan and couldn’t assure the bank which it would allow which activity.”
Reportedly, which was the straw which broke the camel’s back.
What Does The Twitterati Think About Diem ‘s Demise?
Bitcoin advocate and Casa’s CTO Jameson Lopp tweeted, “We knew Libra was DOA as shortly as Zuck said they wouldn’t do anything without getting permission from regulators first.” The man, the myth, the legend Adam Back responded, “IMO why the US regulators and political system reacted so fast and negatively to libra was to protect the USD from privatised seigniorage.”
For her part, journalist, podcaster, and El Salvador’s resident Stacy Herbert said, “This is why El Salvador is bitcoin only. All sh**coins are vulnerable to regulatory annihilation or chief executive rug pull.”
Featured Image by Muhammad Asyfaul on Unsplash | Charts by TradingView